It’s been 25 years or more since buying a home in Vermont was this affordable and this year should see a further improvement, according to The Vermont Economy Newsletter’s annual housing affordability analysis.

The share of median family income needed to make the monthly mortgage payment on a median-priced home in the state fell to 13.1 percent in 2011, Westford economist Arthur Woolf said Monday.

That’s the lowest percentage in the 25 years Woolf has tracked housing affordability. He said other evidence points to the most affordable housing market since at least the early 1970s.

He said three factors worked in favor of housing affordability last year. “Usually, it’s just one or two,” he said. “Certainly mortgage rates were the dominant factor but if you think about it mortgage rates were lower, housing prices fell a little bit and incomes rose.”

On a national level, Woolf said last year also set a record for affordability.

He said mortgage rates averaged less than 4.5 percent on a 30-year fixed-rate mortgage last year while interest rates on variable rate mortgages were even lower. The state’s median housing price fell to $189,000.

Affordability has shown steady improvement over the last five years. In the late 1990s, Woolf said a family earning the state’s median income spent 14 percent of their income on mortgage payments. By 2006 with the real estate market heating up, that measure rose to 19 percent. Last year, it fell to 13.1 percent of median income.

Housing advocates point out that affording the monthly mortgage payment is not the only factor that someone must consider when buying a home.

Woolf’s analysis only looks at median income of married couples. That analysis concerns Sarah Carpenter of the Vermont Housing Finance Agency, who said the analysis leaves out single heads of households. “So, we have a fair amount of singles that want to buy a home, single parents, and his reference point is those who would have 20 percent down,” said Carpenter, the VHFA executive director.

Without a 20 percent down payment, Carpenter said banks require mortgage insurance, which adds to the cost and is more difficult to obtain.

She said based on Woolf’s analysis home buying may be “mathematically cheaper,” but VHFA sees “continued barriers ...for those who need to qualify for mortgage insurance and are being asked to come to the closing table with higher down payment and may have lower median incomes because they’re single heads of households.”

Carpenter said the average down payment of a VHFA client is 3 percent to 5 percent.

Ludy Biddle, executive director of Neighborworks of Western Vermont, said homeowners also incur other expenses including property taxes, insurance, heating and maintenance.

Biddle was in agreement that homeownership is more affordable today than it has been in quite some time.

“As the housing market does pick up, I want moderate income households that still have the dream of homeownership not to feel discouraged by such things as more stringent credit requirements, more stringent downpayment requirements,” Biddle said.

The circumstances that led up to the mortgage crisis three years ago was the result of bad lending practices not irresponsible borrowers, Biddle said, citing the book, “Regaining the Dream: How to Renew the Promise of Homeownership for America’s Working Families.”

Published by the Brookings Institution, the book’s authors found that 95 percent of low-income families made their mortgage payments successfully despite the Great Recession.

Biddle said Neighborworks can walk would-be homeowners through the process with homebuyer education seminars and also provide financial assistance.

Although other expenses add to the cost of owning a home, including insurance and property taxes, Woolf said those costs are not out of line relative to incomes or home prices.

He said none of those factors changes the overall trend.

“That is, even if you add in all the extra costs of owning a home,” Woolf said, “if they were all 1 percentage point higher … it still would be that last year housing affordability was at a record level.”

Woolf said affordability is likely to improve again this year, driven by low interest rates, stable housing prices and a rise in median income.

“It’s a very good time for people to buy homes now … especially if you’re a young person,” he said.

The median housing price used in the analysis is based on the sale of 5,300 homes sold last year. The state property transfer tax data does not include vacation homes. Half of the homes sold cost more than the median and half cost less.

Mortgage rates used are 30-year fixed-rate mortgages with a 20 percent down payment. The income measure used is the median income of married taxpayers filing joint returns, calculated from state Tax Department data.